Sad : to be proven right

 

 

FAME II was launched under National E Mobility Mission Plan [ NEMP – 2012 ]

 

It was to cover period > April 2019 – March 2022 ( 3 years )

 

It had very modest targets re production / sale of Electric Vehicles, for which a provision of Rs 8596 crore was made towards “ subsidies “ to buyers purchasing EVs

 

Nearly one-and-half year ( half of cover period ) is over and the “ Actual Achievements “ are heart-breaking ( for want of a better word and in order not to blame any particular person/s )

 

I did envisage the likely problems – as also some “ Course Corrections “ required, and sent following e-mail to Policy Makers :

 

FAME II > FAME III > FAME IV …………………………….[ 05 March 2019 ]

 

In that e-mail , I had made some “ guestimates “ of the number of EVs that might get sold, in each of those 3 years .

 

Following is  a tabulation from my above-mentioned blog / email ( except for the last column which I inserted today, based on following news report that appeared in Economic Times of 20^th Oct ) :

 

FAME II Scheme for EVs far away from its destination

 

Extract :

 

Ø  The number of vehicles subsidized from April 2019 till the end of last month was fewer than 2 % of the target for the scheme period , government data showed

 

Ø  FAME II …has a budget of Rs 8596 crore for giving subsidies alone, but just Rs 77.3 crore or less than 1 % of that was spent till the end of September

 

Ø  These regulations made the EVs pricier than imported vehicles even after the subsidies

 

 

Ø  800+ New stores set up in 2019 sold cheaper EVs imported from China

 

 

 

 

Type of Veh	17-18(Actual)	18-19(Est)	19-20(Est)	20-21(Est)	3yr total(E)	3yr Target	%age likely	Actual Achieved till Sept 2020
Buses	200	500	750	1000	2,250	7090	32
Cars ( Hy )	Nil	500	1,000	2,000	3,500	20,000	17.5
Cars ( E )	1,200	3,000	5,000	7,000	15,000	35,000	43	1,295( 2.35 %)
3 Wheelers ( excluding E - Ricks with less than 5 KWh battery )	132,000 ( all sold were under 5 kwh battery, which do not qualify for subsidy )	10,000 ( with battery bigger than 5 KWh )	15,000	25,000	50,000	500,000	10	6,836    ( 1.36 % )
2 Wheeler	58,400	75,000	100,000	125,000	300,000	1,000,000	30	21,727  ( 2.17 % )

 

In my e-mail, I listed following “ Shortcomings “ of FAME II :

 

#     It focuses solely on “ Incentivizing the Buyers “ through subsidies

 

 #    There are no “ Incentives “ for the vehicle manufacturers to ramp up

       production or commercialize “ cost reducing “ technologies, especially in the

      matter of Lithium-ion batteries which constitute up to 40 % of EV ex-factory

       price

              

 #    There are no “ dis-incentives “ for manufacture / sale / purchase of Petrol – 

       Diesel vehicles

  

#    Linking the subsidy amounts with battery size is not the right method. In fact

      a vehicle with a smaller size battery, but giving same performance ( speed –

      range – charging time etc ) as a vehicle with a bigger battery, should be

      rewarded with higher subsidy !

            

      Efficient use of input resources must be encouraged

 

  #    There is no directive with regard to scrapping of old ( more than 10 years )

       petrol / diesel vehicles 

 

And that e-mail also included following suggestions to accelerate adoption of EVs :

===================================================

[ A ]….. MANUFACTURERS

 

 

           ( A.1 ) Policy Instrument >  Corporate Income Tax  for  Incentivizing the

                      manufacturers of Batteries

 

                     Total exemption of Corporate Income Tax for companies exclusively

                     engaged in the manufacture of :

 

 

                    #  Aluminium-Air Batteries  (  No need for any roadside battery 

                         charging stations  ! )

               #  Sodium-ion  Batteries   (  Reduce battery cost to 10 % of Lithium-

                    ion Battery cost ! )

                    #   Fuel Cell ( based on hydrolysis ) developed by  CECRI  (  literally 

                         FREE electricity and zero pollution )

                         

                    #   Other developments in fast-charging batteries ( under 5 minutes

                         for 80 % charge )

 

           A.2 )  Abolish Corporate Income Tax ( for 10 years ) for the entire E

                    Mobility Eco-System

          ( A.3 )  Incentivizing the E Vehicle manufacturers

                     #  E Cars having Solar Rooftop powering a small Li-ion Battery

 

                      #  Policy Instrument  >  Carbon Credits

 

                   Based on car specifications / assumed average monthly usage  etc ,

                   figure out and fix,

 

                   *  " Carbon Credits " for each model of electric car manufactured

 

                   *   Based on Carbon Credits earned , calculate Direct Transfer of 

                        Benefit ( DTB ) to electric  car manufacturers based on monthly

                        dispatches of each model and then transfer these amounts from

                        EVFF ( Electric Vehicle Finance Fund ) , as incentives to 

                        manufacturers 

 

                                       

                                

     ( A.4 )   Dis-incentivize manufacturers for production of Petrol / Diesel

                 vehicles

               This could be achieved by gradually raising the GST rate for such

                vehicles, starting from April 2022 and simultaneously gradual 

                   reduction in the GST rate for Electric vehicles

               

   ( A.5 )  Incentivizing manufacturers to get into the “ Recycling of Old Vehicles “

              By ordering to stop usage of old vehicles in Delhi, already a serious

              problem has arisen in respect of  their storage and disposal . When

              applied on all-India basis, this could lead to millions of old vehicles

              getting “ abandoned “ and cluttering the city-scape

              

=================================================

[  B  ]   BUYERS

           ( B.1 )  Incentivize for purchase of E Vehicles – especially, leasing of buses

                       Provide depreciation to private individual buyers

           ( B.2 )  Incentivize Retro-fitting of old Petrol / Diesel vehicles ( non-

                      compliant with BS VI norms )

                      Give subsidies to “Current Owners of Old Vehicles “ at 150 % of

                      subsidies announced under FAME II

           ( B.3 )  Incentivize to switch-over to E Bikes

           ( B.4 )  Policy Instrument  >  Taxing all Vehicles based on their “ Harm 

                      Quotient “ for environment

                      Dis-incentivize purchase of Petrol / Diesel vehicles

==============================================

[  C  ]   GOVERNMENT

           ( C.1 )  P0licy Instrument  >   Wet Leasing

==============================================

[   D  ]   PASSENGERS OF  PUBLIC  TRANSPORT ( Non-Vehicle Owners )

 

            For taxis / rickshaws running on Hybrid fuel ( producing less Co2 ) or

            Electric Vehicles ( zero emission ) ,both , the driver and the passenger will

            get " Carbon Credits " , which will also get displayed on the DigiMet as

            also on the FareCalc  Mobile App on the smart phone of the passenger ( @

            20 % of the fare payable ? )

            

                            

            These amounts will get transferred to their respective Jan Dhan Bank

            Accounts ( thru DTB ) , every quarter

==============================================

[  E  ]   SOLAR  POWER  for  ELECTRIC  VEHICLES

 

           Policy  Instrument  >  Amendment to Electricity Act

 

          Anyone can generate and SELL electricity , anytime and to anyone and

          at any price !

==============================================

 

Policy-makers interested in details of each of the above-mentioned suggestions , may look up :

 FAME II > FAME III > FAME IV …………………………….[ 05 March 2019 ]

 

===================================================

Dear Shri Nitin Gadkariji / Shri Piyush Goyalji / Shri R K Singhji,

 

It is not as yet, too late to  “  salvage  “  FAME II , from being an ignominious chapter of

“  India’s EV journey into a tunnel of Darkness “

 

With regards,

Hemen Parekh  /  hcp@RecruitGuru.com  /  21 Oct 2020